Direct-to-Consumer Continues to Rise in 2019

RetailTechNews has asked industry thought leaders what they believe 2019 will hold for the retail sector. Today’s topic sees experts take a closer look at what next year has in store for direct-to-consumer brands.

“In 2019 direct-to-consumer brands will build the muscle to connect in-person, and in doing so will boost their reputation, grow their customer base, and unlock powerful datasets that reveal their most loyal fans. This becomes possible when these brands adopt thoughtful and consistent event programs that are deeply connected to the overall brand.”

“Consumers are the pivotal focus for any brand, and while the implementation of the GDPR has given them more control over their data, shoppers are at the same time demanding an extremely personal digital shopping experience that requires greater data insights.

“The rise in direct-to-consumer brands has already provided a more in-depth understanding of online customer behaviour, along with more competitive pricing and improved supply chains. Brands can take this one step further in 2019, by harnessing the power of machine learning (ML) technology in their marketing and advertising strategies. Equipped with the insights this provides, they will be able to deliver a more engaging and tailored experience for both existing and new customers, providing relevant ads and offers to make each customer journey both unique and rewarding.”

“The rise of direct-to-consumer brands is a natural digital evolution. Social media has played a large part in this by enabling customers to share and exchange experiences that credit the brands themselves, rather than the retailer. If fact, we’re now seeing even more retailers creating their own labels and lines of products to generate customer content in a similar fashion. Ratings and reviews help customers feel they’re making an informed purchase decision.

“This content also assists in product discoverability and gives early stage brands valuable product insights to inform not only how they might effectively bring future products to market, but also perfect product design. Over the next year, direct-to-consumer brands will have enormous opportunity to use the voice of the customer to create more meaningful shopper experiences which will ultimately result in increased basket value and customer loyalty.”

“One consideration is how DTC will play out with the ever rising tide of influencer marketing – our research earlier this year highlighted growing fatigue with celebrity content. Four out of every five UK respondents are more likely to trust a customer product review over a well-known influencer or even an independent critic. For social media stars and brands, sharing the workload with real customers is a win-win.”

“The availability of data has democratised marketing for retailers. Legacy retail brands that once were the main point of contact for consumers are now competing with emerging direct-to-consumer brands that are typically digital natives who have come of age with data-driven marketing. In 2019, both groups must perfect their digital strategies by uncovering and leveraging the most effective audience insights across advertising channels. One of the most important channels will be Amazon, where nearly half of consumer product searches begin. We predict that Amazon advertising revenue will grow exponentially next year as marketers seize the unique opportunity to advertise in the environment where customers will not just search for a product but also buy it.”

Digitally native brands are gradually chipping away at CPG market share. To ensure they remain competitive, we’re likely to see more CPG brands adopt a DTC model in 2019. However, it’s essential that they are realistic about the market share they can lay claim to. If they truly want to retain consumer interest they will have to move towards service over product. The key is to start small before gradually scaling to build a community, all facilitated by intuitive interfaces which can compete on the design-front.

By investing in such experiences, and a product that meets the needs of the consumer, traditional CPG brands can become legitimate rivals to the challenger – or Digitally Native – brands nipping at their heels.

“The rise of direct to consumer brands is a topic that is starting to register in the minds of many marketers, whether from a digital or ‘traditional’ background. A wealth of brands, including Monzo, Eve and Mahabis, alongside many others, are demonstrating that it is possible to build multi-billion-dollar businesses using long-term brand comms, but in a digital environment. Many of these huge companies are not known outside of their passionate audience, however having built a core they are now expanding at a rapid rate and starting to embrace other channels. I think this is a fascinating space and one IAB UK will be addressing in 2019. These brands demonstrate that ‘The Long and the Short of It’ was right: the blend of brand vs direct response is important, not which channel you should use for each.”

“In 2019, DTC will disrupt physical retail, and mass personalisation will finally become a reality. We will see a rise of the subscription model for those items ‘you don’t want to think about’. The trust between the consumer and retailer will be key in this relationship. Retailers will have to ensure they are promoting data transparency, informing consumers of exactly what the data will be used for. Retailers and consumer goods companies will also look to use this data for hyper-personalisation, whether that is for offers or products.”